RPT-EXCLUSIVE-Toshiba flips back to favouring Western Digital group for chip unit sale-sources

Kentaro Hamada and Taro Fuse

Published 1:50 PM ET Tue, 19 Sept 2017
Reuters

unit sale-sources@ (Repeats without change)

TOKYO, Sept 20 (Reuters) - Toshiba Corp is shifting back toward selling its prized semiconductor unit to a group backed by joint venture partner Western Digital Corp, just days after saying it was leaning toward a rival bid including a South Korean chipmaker, people familiar with the deal said in the latest in a series of twists for the critical deal.

California-based Western Digital made key concessions to assure Toshiba it wouldn't seek future control of the chip business, addressing antitrust concerns and turning the tide away from the bid led by U.S. private equity firm Bain Capital LP and SK Hynix Inc, said the sources, who asked not to be named as the discussions are private.

Toshiba board members are to meet Wednesday, but it was unclear whether they could reach any decision, after saying last Wednesday the company was accelerating talks with the Hynix group. That announcement marked the third time Toshiba had missed targets to sell the $18 billion business - the world's second-biggest producer of NAND memory chips.

The company needs the cash to plug a giant hole in its finances from its bankrupt U.S. nuclear unit Westinghouse Electric Corp.

Toshiba and SK Hynix could not be reached outside business hours. A Western Digital spokesman declined comment. Bain Capital didn't immediately respond to a request for comment. (Reporting by Kentaro Hamada, Taro Fuse and Makiko Yamazaki in Tokyo; Additional reporting by Liana B. Baker in San Francisco; iting by William Mallard)